Obamacare Is Still a Critical Business Challenge

Obamacare (aka The Affordable Care Act) may or may not be waning as a campaign issue for the November mid-term elections, but there’s no doubt it’s looming larger than ever as a business issue for CEOs and company owners.

The sweeping Affordable Care Act continues to demonstrate a variety of huge business and consumer impacts as it provides carrots and sticks for companies and employees when it comes to dealing with their health-insurance needs. That’s one big reason it remains a potent political football despite a lack of zeal about the issue on the part of some Republican candidates this election season.

As CEOs and company owners make their decisions about the future of healthcare coverage at their own companies and of the economy as a whole, there’s little doubt they consider Obamacare to be a net negative. This year, 48.6% of businesses surveyed told the Dallas Fed that Obamacare is raising healthcare costs for employees a lot, and 35.1% said it raises costs “a little”; 54.7% expect it to raise costs a lot next year as well, and 29.7% a little. They say it’s more difficult under the law’s edicts, incentives and penalties to offer employees health coverage.

“As CEOs and company owners make their decisions about the future of healthcare coverage at their own companies, there’s little doubt they consider Obamacare to be a net negative.”

Meanwhile, a quarter of businesses surveyed said they have cut workers because of the Affordable Care Act; another 16.5% now have a higher proportion of part-time workers than full-time workers because of the law.

Obamacare also is hitting businesses with increased taxes, as well. This is a problem that is slated to grow in proportion when a big tax on “Cadillac” health plans takes effect in 2018 to help pay for what are expected to be steadily ballooning costs of implementing the government-run health system across the U.S. economy.

For their part, employees are shelling out a rising share of insurance premiums—28% last year, compared with 26% a decade earlier, according to the Kaiser Family Foundation. And their insurance is skimpier: The share of covered workers with $1,000 deductibles reached 38% last year, more than twice the level in 2008.

Yet, as The Economist noted, workers “also get more control over spending, and more reasons to shop around.” More companies are choosing to deal with Obamacare by ending their own health plans, giving workers a set amount of money and encouraging them to join one of the state-level health exchanges created under the Affordable Care Act.

So, in this sense, Obamacare is fulfilling its stated objective of insuring the uninsured. It’s just that the social program to end all social programs is also creating the uninsured in the first place.